Lowe’s Companies, Inc. (LOW) Oppenheimer’s 24th Annual Consumer Growth and E-Commerce Conference

Lowe’s Companies, Inc. (NYSE:LOW) Oppenheimer’s 24th Annual Consumer Growth and E-Commerce Conference June 26, 2024 9:00 AM ET

Company Participants

Brandon Sink – Chief Financial Officer
Kate Pearlman – Investor Relations
Marvin Ellison – Chief Executive Officer

Conference Call Participants

Brian Nagel – Oppenheimer

Brian Nagel

Well, good morning. Thank you all for joining us today. So my name is Brian Nagel, I work at Oppenheimer as our consumer growth and e-commerce analyst. So this meeting with Lowe’s very much represents a continuation of our 24th Annual Oppenheimer Consumer Growth and E-commerce Conference. So again, we appreciate you all for taking the time to dial in and I’m very pleased to have with us the Senior Leadership team of Lowe’s, CEO Marvin Ellison; CFO Brandon Sink; and Investor Relations, Kate Pearlman. So team Lowe’s, thank you very much for joining us.

Brandon Sink

Thank you for having us, Brian.

Kate Pearlman

Thanks, Brian.

Question-and-Answer Session

Q – Brian Nagel

Really appreciate it. So we’re going to structure this as a fireside chat between with me and Lowe’s, me asking questions, Lowe’s answering these questions. To the extent there are questions from the audience to send them through the chat, and I’ll be happy to work them into our conversation.

But I thought, before we jump into the specifics of Lowe’s, one of the key questions I’ve been asking companies at our conference is just maybe to give their assessment of the health of the U.S. Consumer. Lowe’s being an extraordinarily well-run company and leading the home improvement chain, I think, has a very good understanding of consumer spending, insight into consumer spending. So maybe we can start there before we jump into more specific questions on Lowe’s.

Marvin Ellison

Okay. So, Brian, always a pleasure to be with you. So I’ll start out, and I think the best way to discuss the consumer for us is in terms of our DIY Do-It-Yourself and our Pro customers. So let me start with the DIY consumer. This consumer remains very cautious, specifically when you think about larger ticket discretionary purchases. And the segment and the sentiment for the DIY consumer remains a bit weak, influenced by things like persistent inflation. While we see the more affluent DIY consumer, they’re still spending on services and experiences, and that’s still a result of being pinned up during the pandemic. People are getting out and they want to experience things again.

In addition to that, as you know, mortgage rates remain high and turnover is at historic lows. And so you have what we describe as a locked in place for a lot of homeowners with these low rates. So given these trends, as we look at home improvement span in the near-term, we think it’s going to be focused more on smaller projects and looking for value. And we are working to position ourselves to be in that space as effectively as we can.

Now, as I transition to the Pro segment, I want to remind you that our focus in that segment is the small to medium-sized Pro customer. And this customer remains really resilient. And our most recent pro surveys, which we try to do on a quarterly basis, shows that their backlog of work and projects are very consistent with last year, which is actually good news for us. And we’ve discussed at our most recent analyst conference that we have an expectation that we’re going to grow this specific segment 2 times the market. We’ve been able to do that. We think we can continue to do it. So that’s a little bit of a view from two different lenses of the DIY homeowner and the Pro segment.

Brian Nagel

No, it’s very helpful, Marvin. So just maybe one follow-up question on that. Again, for the sake of our clients, I know in a lot of my conversations with our clients lately, everyone’s trying to assess in real time to help the consumer. Do you think these pressures that you’re articulating here on broader spending, are they getting worse, staying the same, or maybe are you starting to get better?

Marvin Ellison

I’ll give you a view and I’ll let Brandon jump in. I think from our perspective, they’re pretty much staying the same. I mean, as we look at last year, we saw a precipitous fall in demand starting around August of last year. And so we kind of looked at this year as we planned it out and forecasted that we would get more of the same for 2024. And I think that’s pretty much what we’re saying.

Now, you’ve got to factor in a couple of unique things, and that is weather. As you know, home improvement is a really weather correlating retail format, specifically this time of the year, because spring is our peak season. And so when we deal with unique weather, like this kind of heat dome we’re dealing with now, or you deal with more persistent rain and other types of precipitation, you know, that throws a little bit, you know, of an anomaly in. But relative to sentiment, we see it pretty much the same. I don’t say better or worse. Brandon, you can have a…

Brandon Sink

Yes, I would just say, Brian, we’re obviously looking for any sort of inflection point in particular in what we refer to as the DIY big ticket discretionary, sort of, core categories. And right now, as Marvin mentioned, anything that’s rate sensitive or tied to the new home occasion, given historic housing turnover kind of lows, roughly 4 million units, we continue to see softness in that. So the good news is that’s factored in our guidance. We don’t expect necessarily any change from that. You know, as we transition from the first-half to the second-half of the year.

And that’s essentially what we’re seeing. We’re continuing to see softness in those categories. We’re seeing some bumps in certain seasonal categories around weather, appliances continues to be a good category for us just as we see some of the promo pressure starting to ease over the second-half of the year. But again, some of the big ticket interior categories, decor K&B flooring. Those are categories that we continue to watch and monitor. And again, no real changes or no real inflection points at this point in time.

Marvin Ellison

And I think the key point, Brian, is that it’s pretty much what we expected. So we’re not seeing anything that we’re surprised by. We expect that our Pro segment to be strong in DIY, and we’re seeing that. And we expect that big ticket discretionary pullback to remain, and we’re seeing that. But overall, it’s about what we expected.

Brian Nagel

Very helpful. And just maybe one very short-term comment, just given the — a lot of people’s mind, Marvin, I think you mentioned the heat dome. We’ve been talking about the heat because everyone’s been promoting the heat. As you think about this heat and this excess — and again, this is not necessarily a thing new, because we’ve been dealing with temperatures like this or eradicate for a while. But generally speaking, I mean the success of heat a positive or negative for Lowe’s in the near-term?

Marvin Ellison

Well, in the near term, it’s not a positive because there are certain cycles that take place in outside guard, specifically for your yard that began with preemergence and it goes to different stages of preparation. And when you go from spring to extreme heat, you put pressure on some of those outside garden-related projects. And also when you have customers, as an example, waiting to get the new patio furniture for the season and you’re in excessive heat specifically for a certain geographic area, it could delay or postpone some of those types of purchases.

The good news is that as a retailer that has made a lot of investments on interior categories, we try to pivot to those interior categories doing these excessive heat times. But the unique thing about it is a lot of our business is on the outside of the home in the yard on the exterior during this time with a year and it’s highly dependent on the DIY. So although we have offsets with things like air movement, et cetera, when you have it for an extended period of time, the excessive heat, it really starts to put pressure on the business.

So we’re not there yet, but we’re managing through it. We have really good pivot points. And the great news is we have a lot of experience on this team on the merchandising side and the operations side. So this is not unique for us. We’ve dealt with this many times before. We have different levers we can pull, different things we could shift to, and we’ve been doing that. So for now, we’re just managing through it, and we’ll see how long it persists.

Brian Nagel

Very helpful. So maybe taking a step back, Marvin. So you joined Lowe’s in 2018. Clearly, there’s been a number of events from a macro standpoint that occurred since 2018, not the least of which is been the pandemic. But again, the question I want to ask you, and I know you and I have had this conversation over the years, but so I guess I’m asking more of an update. Since you joined you built a team that’s really very successfully repositioned Lowe’s kind of where are you on that effort? Maybe talk about some of the key wins as you repositioned this company? And then what are you looking at continuing to do from here just from a broader repositioning standpoint?

Marvin Ellison

No, it’s a really good question, Brian. So I think it’s all grounded with our total home strategy. As you remember, when I came in, we focused on what we coined as retail fundamentals. We felt like we had to get the fundamentals of the retail business back in place. And then we shifted now to what we call a toll home strategy. And our objective is to just overall to improve the service offering, so we can compete better in a marketplace that’s broad.

And the things that we’ve done to create this total home environment is investments in Pro loyalty, investments in improving our overall brand lineup, inventory depth, and these are all things in the Pro area that we’re way behind that. In addition to that, we want to improve our online tools. And as a result of this toll home investment just on the Pro side, we’ve improved our Pro penetration from when I arrived here to about 19%, and now we’re over 25%. And we still have a lot of room to grow.

But then we understood that in this retail environment, you have to be an omnichannel retail, and we were not that in 2018. As a matter of fact, in 2018, we couldn’t even give a customer an e-receipt, and I’m not making that up. So we’ve made a lot of investments, and we’ve improved our overall omni experience with a wide variety of gig delivery. We want to serve customers any way they want to shop, online, in store, buy online, pick up in store, buy online, pick up curbside, ship from store. We can do all those things now and we’re really pleased with the progress. But also part of the Total Home strategy is how you localize the store from a merchandising standpoint. And how do you make that store feel like it’s the neighborhood store.

And one great example of that is our role initiative. And those remain our best performing stores and then we’re learning a lot from that. But then we want to take a step back and say, how do we deliver better profitability? How do we become more of a better steward, so to speak, with the capital and how we allocate capital. And so our perpetual productivity initiative or PPI has enabled us to improve operating profit from less than 9% to now over 13% by really focusing on all different functions of the company being more efficient. And we’re just continuing to invest.

So if you ask me the question, where are we? I still say we’re early innings. One of the reasons why we’re encouraged as a company is that we’ve made tremendous progress. We’ve made lots of investments in supply chain, IT infrastructure, omni and some of the things I’ve talked about. But we still look at our project road map for the next three to five years, and there are some robust things on there that we’re still kind of working our way to, that we know will just make us a more efficient company on the top line and also from a profitability standpoint.

So we’re excited about the future. We just have to execute in this downturn, which we are doing really well, and we have to build out the investments for the future because we know that when the cycle changes, we want to be in a great position to take advantage of that. And one of the things that we’re doing is these loyalty programs with Pro and DIY are part of those foundational things that we think will allow us to be in a great position when this cycle finally turns up.

Brian Nagel

So let’s talk about that a little bit with the loyalty programs. So what are you seeing as far as kind of an initial response from your consumers, both on the DIY side and the Pro side. How is that helping to drive the business?

Brandon Sink

Yes. So Brian, I would say still early innings in terms of the DIY loyalty program that launched in March specifically. Our goals there were to drive stickiness, increased number of visits into the store and specifically our ability to market on a more personalized basis. So early innings there. We’re very pleased with what we’ve been able to do there with driving enrollments, driving repeat visits and seeing points redemptions there.

So we’re going to continue to leverage that data continue to drive personalized offers, personalized pricing. We have fulfillment benefits that we’re now offering in terms of parcel looking to continue to lean into that. So very excited about that program and what we’re seeing. And then I think you also mentioned as it relates to MVP, Pro loyalty program. That’s been 18-plus months now. We’re starting to pair that along with our CRM platforms within our stores, we’re able to know who our pros are, what they’re shopping, more importantly, what they are not shopping and be able to pair sort of the digital capabilities that we have with the localized in-store specialists that are serving our Pro customers.

So great momentum, great traction from a Pro standpoint. Marvin mentioned 600 basis points of penetration over the last several years. We continue to drive positive Pro comps quarter after quarter, year after year. I’m just really excited with the momentum that we’re seeing with those loyalty programs, both on the DIY side and on the Pro side.

Brian Nagel

So Brandon, maybe to drill down a little bit more. Is there something you could — as we think about — I mean just said the DIY side — so how does the consumer that is a loyalty member and Lowe’s on the DIY side. How their behavior compare with someone that’s not getting the loyalty program?

Brandon Sink

Yes. So I would say, Brian, our most loyal customers are going to shop 6 to 8x a year relative to smaller frequencies from our other customers. They’re going to have more spend, more repeat visits, higher penetration into programs like credit some of our military customers or some of our most loyal customers. So again, these are customers that are taking advantage of the loyalty program. We now have the ability to see that data, understand that data, harvest that data and provide more personalized offers now throughout their purchasing journey, and it’s more anticipatory now, right?

When they come in through that purchase journey and they’re purchasing a faucet for a bathroom remodel. We now have the ability to sort of understand and anticipate what type of project they’re engaging in and maybe paint as the next categories, we’re able to serve them up a localized and a more relevant offer around a promotion or a tighter price point as an example like that. So again, those are the areas that we’re seeing success, and we’re seeing great traction early on a couple of months in and excited as to what this can do as we look through the balance of the year.

Marvin Ellison

And Brian, really the most simplistic way to think about this is frequency. At the end of the day, the customers that really adapt to the loyalty program, we’re just going to see them more frequently, whether it’s DIY or Pro. And this is the third loyalty program I’ve had the benefit of rolling out. And it takes a while for the program to become mature. It takes a while for customers to change their shopping habits.

But we’ve been really pleased with what we’re seeing over the last 18 months in Pro. And we’ll continue to learn and tweak and the same thing with DIY is really early, but to Brandon’s point, we’re pleased with what we’re learning. We’re pleased with some of the insights that we’re gleaning and we think that we’ll just continue to build throughout the year and as we continue to make this a more mature program and customers become more acquainted with it.

Brian Nagel

So Marvin, going back — that’s very helpful. And going back to the comment just about how the business has transformed. I mean as you look about — if you look towards the progress from here, are there still key pieces of the infrastructure that needs to be built out or is it more processes?

Marvin Ellison

It’s a combination of both. I mean, as I think about what we’re most excited about in the future. It’s the continued ability to get more productivity from our space. We have the luxury of still having opportunity to make our stores more productive. It’s one of the reasons why, as we think about the decision around new stores and aggressively building new stores versus capital investments in existing stores to create more space productivity. For us, the opportunity to be still is in the existing store and the productivity we can gain from that.

And as much work as we’ve been able to do and the success we’ve had on the different resets and the different store layouts and the brands we brought on board, we still have quite a bit of opportunity to look at our stores to make them more productive. And so we’re just excited about that. And that’s a very broad statement, because that means we’re going to see more efficiency in our omnichannel and the choices we have. That means things like this whole front-end transformation where we’re putting in omni holding space, we’re putting in modern self-checkout, we’re able to create more selling space upfront.

As we look at our different merchandising assortments and expansion, things like pet which has resonated really well with our customers, things like rule that I’ve mentioned, things like workwear. All of these product choices, we’ve been testing and that we’re finding out that we can get these permanent locations that’s going to just continue to give us more of a productive store environment and an online environment. And then we think about some of the things we’re doing with our supply chain and what we’ve done with market delivery, how we’ve now created a best-in-class delivery mechanism for appliances.

The question is what’s next. If appliances can go through that network and we can do same day, next day, two day in almost every market in the country. What other big and bulky items can we put within that network. And we’re just really excited about online in the omnichannel and just being able to create a seamless connection between digital and physical.

So as we think about it, Brian, it’s a combination of taking the foundational things that we’ve already put in place, and we were very purposeful that the first five years is going to be about really foundational things, IT infrastructure, supply chain, pricing tools, merchandising assortment tools, et cetera. And then now how do you build on those foundational things to create more and more value. That’s why when we look for the next three to five years as we get out of this macro cycle we’re in, we get really excited about the possibilities.

Brian Nagel

And on the Pro side, you’ve talked about your competitor talks — your primary competitor talks a lot about just still very expensive market share opportunity out there, given the fragmented — still the ongoing fragmentation of the market. So it helps us understand as you look at the market share, where is that coming from? And I guess maybe asked another way, if you look at your Pro customers today, to what extent is it a function of attracting more Pro customers or getting better spend out of your existing customers?

Brandon Sink

Yes. So Brian, I would say actually, it’s both, right? I think when we break down the market, we look at a $500 billion TAM. The small to medium Pro continues to be our focus, and we’ve sized that at roughly half of that $500 billion. So call it $250 billion, the focus there is on the repair remodeler, the trades, in particular, painters, plumbers, electricians and then commercial, residential, property management. We feel like that’s a sweet spot. That’s an opportunity for us. That customer continues to prove resilient. Their backlogs are healthy, albeit smaller projects. They continue to have access to materials to labor and the credit.

And we’re looking at that audience really is continuing to be underserved. We think there’s a lot of runway. We have convenience offering through our stores, our lowest Pro supply business serves residential and commercial property manager. We believe that has a lot of runway and a lot of room for us to run.

And then we’re continuing to build out new and different digital capabilities and fulfillment options to serve those Pros. So as you mentioned, it’s a large fragmented market. We’re going to continue to leverage the existing assets that we have to lean in, and we’ve seen great success here over the last several years. But again, I think there’s a large runway in front of us with that particular customer in the small to medium segment.

Brian Nagel

To me answer the question. So if I’m Pro customer for loans. And I’m not shopping lows today. Where am I shopping?

Marvin Ellison

I mean it’s a really good question [Technical Difficulty] to Brandon’s point, you got a $500 billion marketplace. And of that, we think the small to medium is 250. So it could be a variety of places. It could be a local plumbing supply store. It could be a local electrical shop, it could be online, it could be another brick or mortar competitor. It could be a lumber yard, it could be a building supply yard. So this is really fragmented. And oftentimes, our Pro customers specifically the small to medium, I mean, they just — they get into shopping routines and relationships matter. But what also matters is convenience. And what also matters is brands.

And one of the big mistakes that occurred prior to this management team is that the previous management team did not understand the importance of national brands and brand affinity to Pro customers. And they were chasing margin rate. And so they took a lot of national brands on the Pro [Technical Difficulty] to try to drive margin rate improvement. What they didn’t understand is by doing that, they lost loyalty from certain segments of Pro customers.

And so we have to go back and do a lot of work to get the Simpson strong ties and the client tools back in our assortment. And we’ve been able to do that. And so now we’re in a position where we feel really good about the brands that we carry relative to the Pro, we feel good about our ability to price competitively on key commodity products. And we also believe now that the key for us is going to be about getting maturity in this loyalty program and leveraging our improved fulfillment capabilities, so we can get products to the job site seamlessly for these customers.

And those are the things that we’re working on is one of the reasons why to Brandon’s point, we think this is an underserved segment of Pro that we’re taking market share in. And we have been really pleased with the response of our Pro customers even in this current economic cycle, our Pro customer has been really strong for us relative to the DIY.

Brian Nagel

Your competitor — your primary competitor recently articulated and closed a transaction within the Pro side. So the question I have for you, Marvin, and Brandon, is do you see from a Lowe’s perspective consolidation within the space in order to continue to build out your Pro effort, are you looking at potential acquisition opportunities as well?

Brandon Sink

Yes. So Brian, I would say we have a business development function that we’re always looking at opportunities and adjacencies, the ability to accelerate our total home strategy and core competencies. But at the same time, I would say our competitors acquisition doesn’t necessarily change our strategy. As I mentioned, again, we’re — we continue to be laser focused on the small to medium Pro the $250 billion addressable market that’s out there, highly fragmented, and those Pros continue to tell us that they’re underserved.

So again, leveraging our existing assets, we think it’s a huge runway our ability to take share both from a sales and profitability standpoint leveraging again our existing assets. That’s through loyalty, CRM, expanded digital capabilities around ability for a customer digitally to schedule delivery to have a quote online, schedule a runner into our stores, the expanded assortment that Marvin talked about. Again, those are all capabilities that we continue to lean into. And again, what we saw with us doesn’t change our focus and doesn’t change our strategy.

Marvin Ellison

Yes. And I just — to be really clear, Brian, we’re always going to consider M&A opportunities that support our Total Home strategy on the Pro and the DIY side, but we’re going to be really opportunistic. We felt strongly that there were foundational things that we had to fix and there were foundational elements we had to put in place. I mean we wanted to have a strong supply chain. We want to have a solid IT infrastructure. We want to have a really good omni and digital presence, and we felt like it was important to have some level of maturity around loyalty programs, both Pro and DIY.

And many other things that we’ve been working on for the last five-plus years, and now again, that we now have these foundational things in place, we think that we now have the ability to make some strategic investments where they make sense and where they give us capabilities or they give us the ability to kind of build on this Total Home strategy.

So we’ll keep our eyes open, but nothing that’s happened from a competitive standpoint puts any pressure on us to go out and do something different. We feel really good about our road map and our strategy and again, we’re making investments now in anticipation that when we come out of this down cycle, we want to come out of it with a lot of momentum, and we think we’ll be able to do that.

Brian Nagel

So a moment ago, you mentioned brands and how bringing these brands back in the lows has been real key to drive better sales, particularly in the commercial side. Is your suite of brands now where should be are there still pieces or components you want to fulfill or fill there.

Marvin Ellison

Look, we’ll never be satisfied, I guess, is a simple answer, but one of the key pillars of the Total Home strategy is really elevating and really increasing our brand assortment and just the overall value of our brands. So as I said earlier, the previous management team really didn’t understand the deep affinity of national brands for Pros. And so we had to address that. And so we went specifically focused on how do we leverage high-quality national brands to get our Pros back.

But concurrently, we want to make sure that we had a really strong private brand portfolio that was high quality on trend that was affordable, but also that lean more to brand-agnostic DIY customers, specifically in the core categories. So when we think about Pro, brands that we brought on board that really give us confidence that our brand portfolio is strong enough now for us to compete on brands like client tools. brands like Symptom Strong, Tie, Little Giant, GRK Shack back. And we already had a long-standing relationship with Sherman-Williams we’re not only increasing relative to pros who paint and some painters out there that love and have strong affinity to the brand.

But even on the DIY side, we’ve been able to bring great natural brands in and out build power equipment like Ego and toll rolled. These brands were not in our portfolio when I arrived here, and so I give the merchants a lot of credit, and we’ve been able to take a brand like Stainmaster and make it a private brand.

And then we have brands like Cobalt and Allen and Roth that most people don’t even realize their private brands because their brand affinity is so strong in the marketplace. And so the best way for me to answer your question is that we believe today that we have the brand portfolio on the Pro and the DIY side that gives us the ability to compete with any competitor effectively and now what we’re doing is we’re building that pricing infrastructure, and we’re leveraging modern data so that we can make sure that we’re priced right and we’ll price competitively so we could win, but we can also continue to bring value to the bottom line.

Brian Nagel

It’s very helpful. So as our time starts to wind down, I did want to shift the conversation maybe a bit nearer term. We’ll follow-up to what we’ve been talking about. But if you look at — I’ll frame this question maybe a couple of different ways. But as we think about the kind of the near-term trajectory in the business, maybe on the DIY side since that’s been the softer cycle. What do you view as the building blocks. What needs to happen in order to sort of say, facilitate or restrengthening in sales on the DIY side?

And then the second question, I guess, is more clear towards you, Brandon. But as you think about that in the guidance you have laid out there, what’s embedded in that guidance for 2024?

Brandon Sink

Yes. I would say, Brian, as it relates to the DIY, continue to expect, again, as I mentioned earlier, some ongoing softness as it relates to DIY, bigger ticket discretionary categories. I think we expected that coming into the year. It’s largely playing out in line with our expectations as we moved here through the second quarter. I think when we look at our seasonal categories, we are very pleased in Q1 with how we evolved our go-to-market strategy, what we saw resonate with the consumer there. I would say, transitioning into Q2. The weather has been a challenge, but where we’ve seen good weather in Q2, we’ve seen those seasonal categories resonate.

So as it relates to DIY, I mentioned earlier, to continue to see some levels of strength as promotional pressure has eased within appliances. We’re seeing some unit bounce back, especially in refrigeration and freezers. Obviously, full-size Grills is another category where we’ve seen some momentum here seasonally in Q2. But just as we approach the guide in the back half, we’re not expecting any change in the macro environment. We continue to expect Pro to run strong for us there.

As we look at the back half of the year, the promo pressure that’s pressured average ticket and appliances starts to ease in the second-half and more of the same from a macro standpoint. So that gives us a high degree of confidence in our full year outlook and our ability to, on an absolute basis, kind of deliver positive comps over the second-half of the year in a more balanced transaction in ticket as we start to transition and look at the second-half of the year.

Marvin Ellison

And Brian, again, and I kind of repeat what I’ve said a couple of different times, if I could just put a headline on what our focus is. So first, we’re working to manage the business well in a down housing market where we have some level of DIY pressure on big-ticket discretionary. So we’re really focused on managing the business in the near term really well to make sure that we can deliver top and bottom line performance relative to the market that we’re in.

But equally as important, we’re making aggressive investments in our overall business, whether that’s in-store investments, online investments, technology, supply chain and the like, so that we will be well positioned when this cycle changes because, as you know, every economic cycle is just that. It’s a cycle. It goes up and then it comes back. And we’re working hard to make our own forecast on what comes back first so that we can be positioned really well to take advantage of the recovery.

And that’s what we’re really focused on, running the business in the here and now and planning for the future, positioning ourselves for long-term growth, we’re really confident in our ability to do that. This is not an easy environment to operate in for any big retailer, but we feel like that we have a great team, we have the right focus, and we’re going to be able to compete well and take share in a down environment.

Brian Nagel

That’s very helpful. So it looks like we have one minute left. Is there anything that we did not discuss that we should have discussed here I want to make sure we get out to the audience.

Marvin Ellison

Look, I think Brandon said it, as we work our way through the second quarter, get to the second-half of the year, I mean we have basically seen everything we expected. We think that the comparisons get easier in the second-half of the year. So as we think about our guide that we laid out in February, we still feel confident in that overall annual guidance, because the back half of the year, the comparisons are easier for us, and we think that’s going to give us the ability to just continue to execute at a really high level.

So again, we feel great about the team we have in place. We’re focused on executing our Total Home strategy and we’re driving our perpetual productivity improvement initiatives, and we have a capital strategy that has served us well, and we’re going to be really disciplined around that. So as tough as this environment is, we’re excited to come and work every day because we know that we made great investments that have yet to pay off. But when the cycle changes and turns, we know that we’re going to be on the right side of that trajectory, and we’re going to hopefully create a lot of value in the future.

Brian Nagel

Marvin, Brandon and Kate, as always, very much appreciate your time. Congratulations on the continued success or as you managed through a difficult environment. So thank you.

Brandon Sink

Thank you, Brain.

Marvin Ellison

Thank you.

Kate Pearlman

Thank you, Brian.